What Mortgage Law Is All About?

Mortgage is the security of the loan to finance the purchase of a property with specified interest rates

. Mortgage is the lenders security for debt. This is the most common method of financing property transactions. The mortgager is the borrower in the mortgage and he transfers the interest. On the other hand, the mortgagee is the investor or a financial institution that provides loan or other interests in exchange of the security interest. As per the residential mortgage law, if the borrower fails to pay, the mortgagee has the right to sell the property to pay off the loan.

Generally the mortgage is paid in installments where the borrower needs to pay the interest as well as the principle amount that was borrowed by the mortgagor. If the mortgagor fails to make payments, then this can result in the foreclosure of the mortgage. As per the acceleration clause in the mortgage, the borrower has to pay off the loan immediately. Foreclosure permits the mortgagee to state that the debt is due. Acceleration clause is applicable in residential and commercial properties. This law can also be imposed if the borrower tries to sell or transfer the property to someone else. In order to avoid foreclosure, the borrower can clear the due payments and the cost incurred for the missed payments.

According to the state law and the terms and conditions of the mortgage agreement, the foreclosure process is carried on. The mortgagee can negotiate with the mortgagors to adjust the terms of the mortgage. There are two kinds of foreclosures that are judicial foreclosures, which require a court order, and non-judicial foreclosures, which can be settled outside the court. If power of sale clause is there in the mortgage, non-judicial foreclosures can be used.

by: jacksmith

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